Ministry of Corporate Affairs has notified enforcement of Section 135 regarding Corporate Social Responsibility (CSR) w.e.f. 1st April, 2014. Section 135 of the Act provides that every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board and the company shall spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.
The organization has two types of accountability, i.e. to inner circle and the outer circle. Inner circle comprises of the management and the workforce of the organization and the outer circle comprises of the society in which it operates. It is the responsibility of the company to contribute towards the social well being also and to carry on its business operations considering the social values simultaneously. CSR enables to integrate the interest of the stakeholders with the policies and actions of the company.